Angry Birds & Toothpaste: A Match Made in Business
By Laurie Kulikowski - 04/18/12 - 6:00 AM EDT
BUENA PARK, Calif. (MainStreet
) -- Puneet Nanda, the man behind oral-care company Dr. Fresh
, had an epiphany last year when he attended a toy show in Hong Kong. With so many Angry Birds
toys and accessories featured and even knockoffs being sold on the street, he knew he had to get the license for Angry Birds. He called his licensing manager back in the U.S. and demanded she fly to immediately Finland to get permission to use the Angry Birds brand.
It was a tough sell to Rovio Entertainment
, the makers of the hugely popular game, but after strong negotiations and a large amount of money, Dr. Fresh announced last week that it was to be the exclusive U.S. manufacturer and marketer of Angry Birds oral-care products.
Since its launch in 2009, the Angry Birds game has been downloaded more than 500 million times across multiple platforms. There is even a possible TV series and film features in the works, Dr. Fresh says. Angry Birds fever has turned everyone from kids to business professionals into gamers, with hundreds of companies hoping to latch on to the brand's success to sell Angry Birds merchandise
Dr. Fresh is one of the fastest growing oral-care companies in the U.S., despite being around since 1998. The company is the developer of more than 250 different personal-care products from a top-selling FireFly
flashing toothbrush for kids to Binaca
breath freshening products. Dr. Fresh licenses for 19 brands including Hello Kitty, Spider-Man, Batman, Barbie and Hot Wheels, to name a few.
Dr. Fresh is up against some heavy hitters in the consumer goods space, such as Colgate-Palmolive
and Procter & Gamble's
According to Nanda, Angry Birds will not agree to a license if the product is generic. Businesses must have something new and different to sell if it wants to be allowed to use the Angry Birds brand. Dr. Fresh is the first to use it for oral-care products.
In the third quarter, Dr. Fresh will release the first of nine new products it has been allowed to sell under the Angry Birds brand - the FireFly Angry Birds Squirt 'N Brush Tooth Foam.
Dr. Fresh is calling it a "new genre" of toothpaste, because it's not a paste but a foam that is literally squirted into the mouth and not on a toothbrush. It allows for easier cleaning of hard-to-reach places and is very user-friendly for kids, especially those with braces. The company says it expects the Angry Birds association and colorful graphics to broaden the product's allure.
And it seems that the fever has already begun. The products are still under production, yet "I probably have more orders from retailers
than the rest of my licenses combined," says Nanda, who is the company's chief executive and has even taken on the persona of Dr. Fresh. (Family and friends even call him by that name.) "It is just unbelievable the demand," he says.
It's an odd combination at first glance - toothbrushes and toothpaste don't naturally come to mind when one thinks of Angry Birds. But brand licensing can be a powerful tool for small businesses if it's done right.
"Brand licensing is tricky. It all relates to the power and the image of the license," says Lonny Strum of Strum Consulting Group
, a marketing consulting firm. "It's kind of like star presenters on TV commercials. You borrow the equity of that brand and you hope it to imbue qualities into your brand. To the degree that those qualities are positive and there's great awareness of it and it has some meaning, it can be a good thing. If it's purely borrowed interest and doesn't have any relation
, it could be a lot of cost for no benefit."
Strum says the toothpaste/Angry Birds connection may not be obvious, but kids are the key to the equation.
"There's high awareness of Angry Birds and I think there is a benefit from a kid's perspective for sure," Strum adds, particularly in a space like toothbrushes and toothpaste. Products are not very well differentiated and other than competing on price, so having a hot trending license like Angry Birds could actually "catapult" the product, Strum says.
Still, business owners should be sure to do a cost analysis before signing on the dotted line, asking questions like: How many toothbrushes will they have to sell in order to pay off the licensing fee? How strict is the legal agreement? And do you fully understand the specific application of the license?
"If you go outside the boundaries ... you can expect litigation and problems from the licensee," Strum says.
Nanda acknowledges that a high price was paid to secure the license (the exact figures were not disclosed) but he feels it will pay off.
"I made a gut decision and after I went through my parameters ... I thought it was worth it," he says.
-- Written by Laurie Kulikowski in New York.
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